Figures just released by the Office of National Statistics claim that the number of households living in fuel poverty has declined by 0.7million (see data here). The government say that less than 5 million households live in fuel poverty, while Uswitch claim that 6.3 million households live in fuel poverty. Uswitch's figure is much more reliable as their's summer 2011 price hikes. We say a family is in fuel poverty when it spends 10% of household income on its dual energy costs of heating the home and operating cooking and electrical appliances. However, as USwitch explain the governments figures are appallingly out of state (here). The publication today by the government only examines fuel costs up to the end of 2010. The Office of National Statistics does admit that if it factored in housing costs then 3 million more households could be described as living in fuel poverty, it also admits that 72% of English households faced a high risk of fuel poverty at year end (2010). It does not include 2011's prices or the first 5 months of this year. This means that it ignores the pressure of
1) 2011's rising inflation
2) a VAT hike to 20% under this Tory government
3) the big 6 energy companies hiking their prices 5 times under this government have plunged millions of extra families into fuel poverty.
The big 6 energy companies hiked their prices by on average 40% under this government and British Gas have warned of 20% hikes in prices in the near future (probably Autumn 2012). Remember, there are on average 2.3 people per household, whilst the graph above shows the number of households in fuel poverty, please bear in mind that the actual number of UK citizens in fuel poverty is 2.3 times higher. A YouGov poll showed that last winter 25 million households delayed switching on their heating right through to late November because they could not afford the bills. Yet, as I show above, the big six energy companies made a combined profit of £4,335,000,000.00 last year. Uswitch predict that 8.5 million Britons will live in fuel poverty by the end of this Tory government (here). The ONS does not factor housing costs into its calculation but admits that if it did, it would add 3 million more households to the numbers of those in fuel poverty. The government also admit that as of the end of 2010, 72% of households in England were at risk of fuel poverty, the evidence from Uswitch suggests that in 2011, for many families that risk materialised.
Labour have the right policies to deal with this problem. Ed Miliband has signalled that he is prepared to regulate the energy companies to compel them to offer the cheapest tariffs as a matter of course to pensioners. In addition, Ed is examining the prospect of using the Labour Party structure (in opposition) to mass buy electricity and sell it back to ordinary people at discounted prices. The logic goes that the increased buying power of Labour's collective membership could yield lower prices from the big 6 energy companies who would have to compete for our custom. Much more is needed of course, but it's a start.